CANBERRA OBSERVED Does budget do heavy lifting or is it "Labor lite"?

News Weekly, May 20, 2017

After many months of enjoying the political ascendancy and the successful conduit to every form of voter discontent, the Labor Party might just be realising that it is missing the one weapon the Coalition still has in its armoury – access to the Treasury coffers.

Scott Morrison’s second budget was aimed at righting the ship of government, which has been floundering virtually since last year’s election campaign that resulted in the Coalition’s majority being slashed to one seat.

Even before the budget Labor’s internal frustrations were showing when it rushed out an advertisement to boost its stocks in Queensland featuring an all-white cast of voters.

Labor was forced to withdraw its Australians First advertisement amid a hail of criticism that it was playing the “racist card” by including only one non-Caucasian person.

Much of the outrage was confected, of course, but in a rare sign of disunity, the man Bill Shorten beat for the Labor leadership, frontbencher Anthony Albanese, described the ad as “a shocker”.

“It’s not the sort of ad that I want my party to be promoting,” said Mr Albanese, who had not seen the ad before it was aired. “I think anyone who sees it will know exactly what’s wrong with it.”

Mr Shorten blamed the approval of the ad on ALP head office and on staffers, but has conceded it was previewed in his office before it was distributed, though he personally did not view it.

Not too much should be read into the spat between Mr Shorten and Mr Albanese, but it is a sign of subterranean leadership rivalry and a lack of warmth between the two most prominent Labor figures in Parliament.

But worse than any embarrassment over a thoughtless advertisement, Labor is also realising that Malcolm Turnbull and Scott Morrison are not afraid to throw overboard all their unpopular policies in an effort to retain government.

In fact, Treasurer Morrison’s second budget was designed to do three things. First, it aims to erase once and for all the lingering resentment from the despised 2014 Joe Hockey budget by junking all the unpalatable measures that remained on the books.

Second, it was designed to eliminate the policy differences between Labor and the Government, particularly on education, health and on the banks. In fact, many commentators after the budget was delivered declared it “Labor lite”. And finally, it was designed to establish a clear narrative for the Government for the future based on the key themes of “fairness, security and opportunity”.

From now, it is a zero-sum game between Labor and the Coalition, with the rough edges taken off Coalition policies, including removing the freeze on indexation of the Medicare Benefits Scheme, guaranteed funding for the National Disability Insurance Scheme through a higher Medicare levy – though not until July 2019 – and an impost on the big banks, thereby helping to negate Labor’s ongoing calls for a royal commission.

On education, the Prime Minister has attempted to outflank Labor on Gonski education funding, basically by co-opting a pure Gonski needs-funding model – without the special deals Julia Gillard had to do with the states to stitch up Gonski Mark I. The PM has also cleverly seconded David Gonski, the pin-up boy of the teachers unions and the left, to conduct a further review into education.

The problem for the Government, however, is that the Catholic sector feels it has been treated unfairly and will almost certainly launch a campaign against the Government because its own funding has been thrown into confusion.

Unless the Government finds a way to placate the Catholic sector, it may find itself in political hot water.

The budget will not make the Coalition immediately popular, but it will eliminate many of the sharper differences between the two parties, giving Mr Turnbull the breathing space he needs.

The real test will be an internal one and whether the conservative wing, led by Tony Abbott, will accept the budget proposals, including the schools package.

What Mr Turnbull and the Treasurer hope is that come election time and at least another more popular budget under its belt, voters will have to consider whether to go with the government they know or take a risk with a Labor government they don’t.